Adpocalypse: Has YouTube cut off its user generated content roots?

In early April this year, YouTube experienced a schism that has angered and frustrated many of its contributors. Several high-profile advertisers, including the likes of McDonald’s, Toyota, and Heinz, pulled their adverts from the platform after it came to light in March that videos featuring extremist or ultra-violent content had ads placed before them of some of the world’s most recognisable brands.

At first glance, this merely looked like YouTube protecting the interests of advertisers in ensuring their brands were not being associated with the distasteful content. But then something strange started to happen.

YouTubers began reporting their revenues were being virtually wiped out with losses of up to 80-90% as they found their content was being demonetised without warning. And this wasn’t just purveyors of extremists views or hate speech who were finding themselves caught in the net to stop brand association with such content.

Indeed, one of YouTube’s biggest home-grown stars, Swedish video game commentator PewDiePie, found his income from his channel reduced to a trickle, despite still gathering millions of views for his content. As one of YouTube’s most potent influencers, he quickly branded YouTube’s strict policy implementation the “Adpocalypse” and it seems it has caused a paradigm shift in the world’s biggest streaming service that has left many independent media creator reeling.

USER GENERATED DISCONTENT

The “Adpocalypse” that YouTubers have experienced occurred over two phases:

·      Firstly, the newly perceived toxicity of the platform that led to major brands pulling advertising created a smaller pot of advertising revenue to share between its contributors.

·      Next, YouTube tried to stem the tide of deserting brands by implementing more severe guidelines to what kinds of content could be monetarised.

Both of these factors left many a contributor finding their revenue from the platform being decimated by either the reduced income of the decreased ad revenue pot or the de-monetising of previously acceptable content that was now falling foul of the new, nebulous guidelines.

The response of PewDiePie after declaring the Adpocalypse was to announce he would be starting a new Twitch channel to offset his dwindling income from YouTube. Of course, the name of the Swedish video games personality ensures plenty of income from direct sponsorship due to his position as a key influencer in the gaming sphere and this applies to many other of his fellow high-profile YouTube stars who are now potentially prioritising YouTube for the exposure it offers rather than revenue.

Likewise, many e-celebrities who grew their fame on YouTube have resorted to the subscription services of Patreon with some even hosting exclusive content on the service instead of YouTube to encourage viewers to subscribe directly to themselves as content creators. It is no surprise then, to see that Patreon and Twitch  are now very much part of the conversation around Adpocalypse.

Adpoc Wc

However, potentially the biggest fallout from YouTube’s actions won’t be the failure to ensure their current crop of stars are ad-friendly but instead, it could mean the e-celebrities of tomorrow using other methods to build their brand since the task of making a name for themselves on YouTube just became considerably more daunting.

SCORCHED EARTH

While YouTube provides access to one of the biggest audiences currently available on the internet, the horizontal effect of their loss in advertising revenue has all but de-incentivised anyone trying to earn an income whilst gaining exposure, with YouTube now only providing the latter in many a contributor’s eyes. It is clear to see from the sentiment expressed below that YouTube’s recent actions have been far from popular:

Sentiment Pie Chart

YouTube have undoubtedly found themselves between a rock and a hard place over the last few months. If they allowed advertising revenue to continue to haemorrhage then, ultimately, there would be no money to spread among its contributors. Conversely, by implementing far stricter policies on what content qualifies to be monetarised, they have left UGC contributors deeply confused as to what is permissible in a monetised video.

The new guidelines are extremely broad as pointed out by prominent YouTuber, h3h3productions, below:

You Tube Guidelines

While the reality is not quite a draconian as the list suggests, it appears the A.I. YouTube is currently using to determine the viability of monetarised content still has a long to way in terms of detecting context. As a result, contributors discussing subjects such as LGBT rights or racism are finding revenue being pulled from their videos, despite featuring no graphic content or offensive language.

The end result of this could be that YouTube is not seen as a particularly fertile ground to grow a user’s brand while gaining income as the platform has set in place a minimum of 10,000 views per user before advertising will be granted. And even once a user reaches that milestone, they will find themselves in a position where their content has to be carefully managed to ensure qualification for ad revenue inside the nebulous classification of their new policies.

Furthermore, the revenue presently offered is not exactly lucrative with views translating into significantly reduced revenue for contributors as the analytics of YouTuber Michael Sawyer -AKA “slowbeef”- are a typical example of:

Dropping Ad Revenue

The overall feeling is now that YouTube cannot be trusted to provide its contributors with a reliable income, regardless of popularity.

A LACK OF INFLUENCE

So, what does this mean for brands on YouTube? In the immediacy, it should mean that Goggle’s platform has rebuilt some assurance with brands that their ads are being placed more carefully. However, due to way advertising is sold on the platform and the ramifications of Adpocalypse, it could mean that brands are losing out on a significant amount of association with some of YouTube’s most powerful independent media influencers.

Some have been quick to associate the recent events at YouTube with similar happenings over at Fox News, where sponsors began pulling ads for Bill O’Reily’s segments on the news network in response to the scandal that engulfed the former anchorman. The key difference there were advertisers weren’t pulling ads from the network entirely, but just in those spaces associated with Bill O’Reily. YouTube, however, can not feasibly offer the same level of accuracy in ad placement due to the vast amount of content committed to the service (some 400 hours of video are uploaded to YouTube every minute) so this meant advertisers had to pull ads from the platform completely.

While this means the method of YouTube selling ad space via portfolio to place those ads into categorical “verticals” has been protected by the platform’s new policies if the independent media on the service refuses or simply ignores these guidelines then that advertising will simply disappear. With the rise in adoption of Patreon from many of YouTube’s contributors, which essentially means the content creators can source income directly from their fans and viewers, this could be an irreversible process where independent media no longer has any incentive to be beholding to confusing and compromising advertising standards set by YouTube.

With over 50% of the 20 most subscribed channels on YouTube belonging to independent creators, this could mean that some of the most impactful advertising space on the platform is lost in the ether of the discourse between Google’s ad guidelines and the will of its contributors.

Likewise, the lack of incentive and higher barriers put in front of new independent media makers could give a significant boost in the audience of a rival platform such as the video game streaming service Twitch (gaming channels make up 20% of the aforementioned 20 most subscribed channels) as the integrated sales of the Amazon-owned platform make generating income more expedient on the service.

Ultimately, while the post-adpocalyptic landscape of YouTube is substantially more ad-friendly, it may well have become appreciably less valuable in the process by ignoring the needs of the very individuals who helped YouTube become the biggest video platform in the world.

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David Murphy

David Murphy

EntSight Researcher